Daily FX Str Europe August 2011

8/6/2019 Daily FX Str Europe August 2011

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2/9

FX IMM Positioning

Latest IMM CFTC data for 26 July showed that shortUSD positions are getting extreme -- to Usd 25.42 bn

in the week ended Jul 26 vs Usd 14.00 bn in the weekprior. At the same time, net long positions in the SwissFranc fell to 7,877 from 11,494 prior whilst bets in favourof the Canadian dollar also dropped to 36,141 from27,764. On the other side of the fence, specs nearlydoubled their long positions in the Euro to 17,038 from9,246 in the week prior and continued to raised their betsin favour of the Yen to a lofty 8mth over high of 51,302from 42,155 prior. Bets against the Sterling werereversed back to a net long position of 1,222 vs a netshort 6,714 position prior, whilst net long positions in theAussie rose to 81,438 from 77,795, in the Kiwi to 23,291from 21,438 and in the Mexican Peso to 91,913 from89,266. (IGM)

US:

Senate Majority Leader Harry Reid (D., Nev.) has"signed off" on a debt ceiling agreement pending theapproval of the Senate Democratic caucus, acongressional aide said Sunday.

The deal would raise the debt ceiling by $2.4 trillion inthree stages and provide initially for roughly $900 billionin spending cuts over 10 years with everything on thetable for a 2nd stage of deficit cutting.

A special committee of lawmakers would be charged withfinding another $1.5 trillion in deficit reduction through atax overhaul and changes to safety-net programs.

House Republican leaders will now brief GOPlawmakers on the deal at 8.30PM and contrary toearlier reports, GOP leaders have yet to sign on to theagreement, with House speaker Boehner balking atsome of the proposals. Both leaders still have the toughtask of rounding up support from their troops andscheduling votes, which are likely to take place notbefore Monday, first in the Senate and then to theHouse for a final vote. (WSJ, IGM)

Obama to Deliver Statement at 8:40 pm ET - Whitehouse (Reuters)

DJ sources: rep. Boehner concerned plan could leadto sharp cuts in military spending. (Reuters)

Moodys: will decide whether to downgrade the UnitedStates' Aaa rating based on the country's economicperformance in 2012 and prospects for future deficitreduction measures. (Reuters)

If United States defaults, lawsuits await-- US cutsabout 100 million checks per month; many obstacles toprivate suits against government; governmentcontractors especially vulnerable. (Reuters)

Fed's Lockhart states that he would not rule out furthereconomic monetary easing but said conditions would

have to worsen. He sees the bar set high for moreeasing.

Fed's Bullard: Rising Inflation Makes New Stimulus

Unlikely; Headline Inflation Could Rise Even More; MustBe 'Circumspect' In Easing Policy Again; Reasonable ToExpect Better Growth Over Second Half; Expects 2h2011 Gdp To Rise To 3.5%; Repeats Fed Can't BailTreasury Out Of A Default; Little need for central bank tohelp beyond what it's doing; Price pressures don't givethe Fed much latitude to act; Should the US default, theonly role the Fed has to play will be in helping keepfinancial markets steady. (Reuters)

US Q2 GDP disappointed expectations coming in at1.3% vs. 1.8%. Q1 GDP was revised down from 1.9%q/qto 0.4% q/q. Personal consumption was weak coming inat 0.1% vs. consensus of 0.8%

Australia/ New Zealand/Canada

AustraliaTD-MI's latest inflation gauge ticked higherover July, to rise by 0.3% over the month after a flatreading prior. On the year the gauge rose back to 3.25from 2.9% prior. At the same time, TD's trimmedmeasure of underlying inflation nudged up by 0.2% vs a0.1% gain prior, raising the annual pace to 2.1% from1.8% prior. According to the gauge, underlying pricepressures still remain contained well within RBA's target2-3% band. (IGM)

Australia Manufacturing activity floundered overJuly; with AIG-PW's Performance of ManufacturingIndex (PMI) tumbling by a hefty 9.5pts over the mthto 43.4. Activity slid back into contractionary territoryafter rising 5.2pts in June to 52.9O, with only three of the12 sub-sectors posting increases. In a negative for thelabour mkt, the seasonally adjusted employment sub-index decreased 3.3pts to 46.1, whilst the new orderssub-index dived by 14.4 pts to 40. (IGM)

Australian Treasurer Wayne Swan on Monday joinedthe chorus of world leaders urging the U.S. to movetoward long-term consolidation of its budget deficit,saying a deal struck Sunday in the U.S. to end the debtceiling impasse is just the first step toward ending thecountry's debt woes. "The economy is strong and we

have the proven ability to deal with global uncertainty...Our region remains strong," he said. Swan added theReserve Bank of Australia will need to consider theglobal environment and recent local inflation data whenits board sits down Tuesday to discuss a possible rise ininterest rates. (Reuters)

Australia New home sales suffered their biggest fallin five months over June, to tumble by 8.7% over themonth after easing by 0.2% prior. According to the latestmthly survey by HIA-Jeld-Wen, sales of detached housesfell for the 2nd straight mth and by a hefty 8.8% vs a2.4% fall prior, whilst sales of multi-units tumbled by8.1% after rebounding by 23.3% in May.(IGM)

Canadian Fin Min Flaherty in a radio interviewexpects the Canadian economy to rebound in the 2Hthis year but growth will be only modest. Canadian

Foreign Exchange Strategy Monday, 01 August 2011

http://www.GlobalMarkets.bnpparibas.com 2
http://www.globalmarkets.bnpparibas.com/http://www.globalmarkets.bnpparibas.com/


3/9

May GDP report showed an unexpected drop of 0.3% orweakest in 2 years. Flaherty also said the govt's fiscalplans remain on track to meet the deficit-reduction goals.Govt data today showed the federal budget deficitnarrowed to C$3.3 bln in first 2 mths of the current fiscalyear compared to a year ago.(IGM)

Europe:

European authorities should stop public bickeringand speak with one voice to make the second rescuepackage for Greece work, warned Christine Lagarde,the new managing director of the IMF. In an interviewwith the Financial Times, the former French financeminister said public discord between eurozone ministersand the European Central Bank over the last bail-out hadcreated confusion in the markets. Putting on myEuropean hat for a microsecond...we did notcommunicate it in a harmonised fashion, nor did weparticularly speak with one voice, she said, adding thatthis time the Europeans must stick to the script. (FT)

Greece and other stricken countries will have fasterand easier access to tens of billions of euros inEuropean Union funds under a plan to help stimulatetheir economies. The plan, to be unveiled, would notinvolve extra assistance but would ease co-financingrules for Greece, Ireland, Portugal, Hungary, Latvia andRomania so that they would not have to put up as muchof their own cash in order to collect EU funds. (FT)

Schaeuble: Defends second Greek rescue package,denied that this month's Greek bailout deal paves theway for a future 'transfer union' in which euro zonecountries are liable for each others' debts. (Reuters)

IIF's Dallara: optimistic about Greek debt swap,second bailout makes Greek debt sustainable, seesGreek bond market return in 18-30 months. (Reuters)

Rating agency Moody's put Spain on review for apossible downgrade: Moody's move to place the Aa2government bond rating on review cited concerns overgrowth and said funding costs would continue to be highin the wake of euro zone leaders' bolder moves to curbthe Greek crisis last week. Particular focus rested onSpain's regional governments who will miss theircollective budget deficit target by up to 0.75% GDP,

Moody's said, hampering the central government'sprogramme of austerity to reduce the overall shortfall.

Spain Election Unlikely to Calm Investors: By the endof last week, Jos Luis Rodrguez Zapatero, Spainsembattled Socialist prime minister, was left with nochoice. He was obliged to break his earlier vow to stay inpower until March, which would have meant completinghis second term of office with some dignity intact. MrZapateros decision on Friday to call an early generalelection on November 20 he characteristically chosethe anniversary of the death of the dictator Franco in1975 to remind voters of the dangers of the political right

was an acknowledgement of defeat. The governments

credibility at home and abroad has been fatallyundermined by three years of economic crisis and byworsening conditions in the eurozone sovereign bondmarkets. (FT)

IMF says Spain's growth outlook dominated by'downside risks' and Spain may need further mediumterm action on the deficit.

UK banks are set to eclipse their European rivals by

making even deeper job cuts as part of sweepingcost-saving measures to reverse rapidly fallingrevenues. (FT)

Irish Central Bank: No reason to significantly alter itsgrowth projections, trimmed GDP forecast in linewith government figures; Euro area growth expectedto continue at a gradual and uneven pace; ExpectsEU unemployment rate to remain stable in 2011 anddecline slowly thereafter although remaining above 9percent. (Reuters)

CBI Lowers UK Growth Forecast Again: The surge incommodity prices and erosion of business confidence isleading to sluggish economic growth, according to theCBI, which has scaled back its growth forecast for thesecond time this year. Britains biggest business groupnow predicts 1.3 per cent growth this year, down from itsforecast of 1.7 per cent in May, which was a reductionfrom its forecast of 1.8 per cent in February. (FT)

China

China July PMI fell to 50.7 (but better than 50.1forecast) compared to 50.9 in Jun. Although slowerthan previous month, the PMI remains well above 50.0

China c. Bank says taming inflation still a priority:

China Central Bank says inflation could rebound ifBeijing relaxes its policy and it will use range ofpolicy tools, including rates and FX China's centralbank on Monday said that it will maintain a prudentmonetary policy and that price pressures would be indanger of escalating if it relaxed its policy. (Reuters)

China should maintain its tight capital controls tocombat "hot money," People's Bank of China adviserXia Bin wrote in an essay published in Caijing magazineon Monday. (DJ)

Former PBOC Adviser: Monetary Policy Likely MoreAccommodating in 2H China's monetary policy will

likely be more accommodating in the second half of theyear amid a likely decline in headline inflation andconcerns over a hard landing for the economy, a formeradviser to the People's Bank of China wrote in an opinionpiece Monday. (DJ)

New law to fight grassroots graft To fight corruption atthe grassroots, China's central authorities have issuedthe first regulations forbidding township and villageofficials from appropriation of land, embezzlement andvote buying. (China Daily)

China c.bank's maturing bills and repos in August Atotal of 352 billion yuan ($54.7 billion) in Chinese central

bank bills and repos are due to mature in August, downslightly from last month, according to Reuterscalculations. (Reuters)




4/9

Residential property prices in 100 major cities inChina rose 0.21% in July from June, slower thanJune's 0.41% month-on-month increase, China RealEstate Index System said Monday. (DJ)

China is drafting measures to promote the domesticsale of goods originally produced for export, ChinaDaily reported, citing Chen Linhui, vice-chief of theprocessing trade division at the Department of ForeignTrade and Economic Cooperation in Guangdongprovince. The measures, expected in September, willinclude a simplified approval process for selling export-oriented goods inside China, financing, and assistance inexpanding sales channels and improving brand image,Chen said, according to the newspaper. (Bloomberg)

China Nonferrous Metal Industrys ForeignEngineering and Construction Co. said its boardapproved a plan to buy 12.3 million shares ofTerramin Australia Ltd. For A$4.55 million ($4.97million), according to a Shenzhen Stock Exchangestatement today. China Nonferrous, the largestshareholder in Terramin, will increase its stake in theAdelaide-based company to 19.86 percent from 14.38percent following the purchase, the statement said.(Bloomberg)

As many as 14 people have been killed in a weekendof violence in the restive western Chinese region ofXinjiang, as deep-rooted tensions in the area againexploded into violence. State-run Xinhua news agencyreported on Sunday that four suspects were shot deadby police in the Silk Road city of Kashgar in north-westXinjiang, after a night of violence on Saturday had left

seven people dead and at least 22 injured. Xinhua saidthe police were reacting to what it called an eruption ofviolence on Sunday afternoon. (FT)

Corporate Japan Warms to Chinese Investors:Corporate Japan appears to be shedding its long-heldsuspicion of Chinese investors after a big jump in thevalue of acquisitions in Japan by mainland companiesthis year. Last weeks agreement by Panasonic to sellthe white goods division of its Sanyo subsidiary to Haier,the Chinese refrigerator and washing machine company,put the value of inbound Chinese investment at $575.5mto the end of July, according to Dealogic, more than fourtimes the total for last year. (FT)

FinMin source: China may help fund Greek bondbuybacks, signs China interested, Greek finmin metChina's IMF representative in Washington. (Reuters)

Japan

Japan escalates warnings on yen rise to protectrecovery; Finmin Noda says weighing how longTokyo can keep yen rise "unattended"; Sources saystill no full agreement on whether and when tointervene; Will take appropriate action in cooperationwith BOJ Noda; BOJ official says focusing on yen riseharm to economy; Factory output up 3.9 pct in June,

confirms recovery on track. (Reuters)

Japan Agency in New Storm The Japanesegovernment disclosed reports Friday showing that its

primary nuclear regulator tried to manipulate publicopinion at forums to promote nuclear power, findings thatfurther damage the industry's already tattered reputation.(WSJ)

Other Asia:

Korea's July CPI rose 4.7%, beating expectations of4.4% and up from 4.4% in June. This is the strongestprint since March 2011 and increases the risk of a 25bprate hike when the BoK meets on 11 August.

Korea reported a trade surplus of USD 7.2bn in July,a sharp improvement from the USD 2.8bn surplus inJune. The stellar trade performance was due to strongexports growth of 27.3% yoy, with import growth steadyat 24.8%. The HSBC PMI print for July too showed anuptick to 51.3 from 51.1 in June.

Bank of Korea Gov. Kim Choong-soo said Mondayhe's worried about the acceleration in consumerprice inflation since May, while reiterating thegovernment's view that inflation will likely ease fromSeptember due to a higher base of comparison in theyear-earlier period. (DJ)

North Korea Wants To Resume Six-Party NuclearTalks Soon North Korea said Monday it wants an earlyresumption of six-party negotiations on its nuclearprogram, following "constructive" talks in New York lastweek. (AFP)

Taiwan's financial regulator will press ahead with a

further expansion of the business scope for theisland's banks in China, particularly in the burgeoningyuan business, in the next official meeting with itsChinese counterpart in September or October, a seniorofficial said. Lee Jih-chu, vice chairwoman of theFinancial Supervisory Commission, also said in aninterview that a Taiwanese bank is in talks with aJapanese bank on a potential merger, which would bethe first such tie-up in Taiwan. She declined to elaborateor to name the banks, and their identities couldn'timmediately be determined. (WSJ)

Philippine banks are fairly resilient and are unlikely tobe adversely affected by a possible increase in interestrate spreads due to the fiscal constraints and weaknessin the U.S. economy, central bank governor AmandoTetangco said on Monday. (Reuters)

Indonesia July headline CPI eased to 4.55% YoY,softer than market consensus of 4.80%, and downfrom 5.54% in June. Core inflation too eased to 4.55%YoY, against market forecast that core CPI would edgeto 4.70% from 4.63% in June. On a month-on-monthbasis, CPI rose 0.67% MoM compared to marketexpectations of 0.85%.On the trade front, June tradesurplus steady at USD 3.33 bn (exp: USD 2.52bn)from USD 3.50bn in May. Exports growth accelerated to49.4% YoY (exp: 44.3% ) from 45.3% in May; whileimports eased to 28.3% YoY (exp: 30.5%) from 48.5% in

May.




5/9

Thailand Jul CPI rose 4.08% y/y (4.15% f/c) vs 4.06%y/y in Jun, which would mark the fastest pace sinceSep 2008. Core CPI up 2.59% y/y in Jul (2.7% f/c) vs2.55% y/y in Jun, which would inch closer to the top endof BoT's target range of 0.5-3.0%. Food/beverage pricesslowed to 7.17% y/y in Jul vs 7.76% y/y in June. On am/m basis, headline CPI +0.18% in Jul vs +0.13% in Jun,core CPI +0.08% in Jul vs +0.18% in Jun, food/ bev-0.20% in Jul vs +0.44% in June. (IGM)




6/9

Who Blinks First Japan or Switzerland? Distaste for USD and EUR means JPY and CHF

getting stronger by default But CHF overvaluation far exceeds that of JPY and

is now starting to hurt; in turn (finally) creating

incentives to reconsider efforts to curb CHF inflowsand/or encourage capital outflows

In contrast to Japan where public expressions of concernat JPY strength are now being heard and the threat ofintervention is again being made, Swiss authorities havebeen noticeably quiet during this latest episode of strongCHF inflows. This has seen USDCHF plumb new recordlows and the broader CHF exchange rate new highs.We have previously noted (see "Market Focus LittleJustification for BoJ intervention", Market Mover, 27 July2011, pp. 57-58) that, whereas the JPY real effectiveexchange rate currently trades weaker than its long termaverage, Switzerlands real exchange rate strength is

truly exceptional now some 20% above its 15-yearaverage.

Until little more than a month ago, Swiss complaintsagainst unrelenting currency strength rang hollow in thecontext of incoming data showing the export sector stillperforming with remarkable strength (evidence in part ofthe relative price insensitivity of many Swiss exports toCHF strength be they high technology capital goods,chemicals or luxury consumer goods). Income effectsfrom rising Asian wealth looked to be transcending thesubstitution effects of higher prices (what economistsrefer to as "Giffin goods"). The income effects fromstellar export performance also looked to be helpingdrive strengthening domestic demand (e.g., retail sales

growth in the year to April of 7.8%).

Swiss data in the past month have painted a rapidlychanging picture. Beginning with the June PMI andconfirmed in the July KOF leading indicator activity levelsemanating from the manufactured goods sector have slidrapidly, with the changes, if not yet levels, consistent withSwitzerland approaching recession territory (see Chart1). Retail sales fell back sharply (albeit the series isexceptionally volatile) and the trade surplus looks to nowbe diminishing. Tuesdays PMI will be especiallyimportant, and another sharp fall will set alarm bellsringing, as too will Fridays CPI. Base effects may holdthe latter up, but if we do see signs that in underlying

terms inflation is at risk of moving further back downaway from the 2% target, this could provide the "call toarms" by the Swiss authorities to make another attemptat curbing CHF strength.

The nature of the flows driving CHF strength continues toleave us sceptical SNB will be tempted to repeat its ill-fated 2010 FX intervention efforts. As Chart 2 shows,deposit inflows are a key driver of CHF strength, andintervention might simply present better entry levels forinvestors still enamoured of Switzerlands ultimate safe-haven status. Latest IMM data in contrast as one proxyof speculative inflows, is not showing evidence ofextended speculative positioning conducive to successful

intervention.Alternative attempts to control capital inflows toSwitzerland, notably the imposition of taxes on non-



Chart 1: KOF, PMI and Swiss Recessions

96 98 00 02 04 06 08 10

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PMI (lhs)

KOF (rhs)

Recessions

Source: Reuters Ecowin Pro, BNP Paribas

Chart 3: Swiss deposit inflows, EURCHF

and Switzerland recessions

94 96 98 00 02 04 06 08 10

billions

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2601.20

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Saving Deposits in CHF bn (RHS)

EURCHF Inverse (LHS)

Source: BNP Paribas

resident deposit inflows, had limited success in the 1972-1978 period when they were last practised and whichculminated in an effective 40% negative interest rate in1978 (tax of 10% per quarter of non-resident deposits).Only when the SNB abandoned monetary discipline and

started targeting the (DEMCHF) exchange rate after1978 did Swiss Franc strength abate whereupon higherinflation followed.

The Swiss authorities will evidently not entertain a repeatof the 1970s policies lightly and may be more inclined totry and encourage capital outflows (why arent Swisscompanies buying up their foreign competitors at theseexchange rates?). But articulation of the threat if notyet the actuality of re-imposing levies on foreigndeposit inflows may well be heard if EURCHF gets downto say the 1.10 area at the same time that incoming dataconfirm that the economy is now suffering badly from thegrip of exceptional exchange-rate strength.


7/9

Daily Currency SummaryG3

EURUSD

With the US reaching a potential deal to avert a default, but not necessarily a downgrade, we expect the USD tocontinue to remain under pressure this week. However, this in itself will unlikely see EURUSD break above the top ofits recent 1.4200-1.4450 range. Price action has already become nuanced with the EUR weakening against theremaining G10 currencies last week, with the move linked to rising risk premiums especially in Spain and Moodyshighlighting of Spain for a potential ratings downgrade has only added to this, playing to the view that EURUSDcontinues to remain a range trade for now.

USDJPY

The JPY has been the biggest loser today (-1% vs. USD) following the US move to reach a potential deal to avert aUS default. However, we expect any USD support to prove transitory as the focus shifts back to the weakness of theUS economy following Fridays very weak US GDP figures. Locally, commentary from Vice Finance Minister Igarashithat the USD is weak, rather than the JPY is strong underscores our view that any intervention seems unlikelygiven the move is driven from external factors far from the control of Japanese officials. USDJPY therefore remainsat risk of a continued move lower, however with Japanese retail margin positions reaching new highs, there is a riskfor a more volatile decline.

JPY Crosses EURJPY has recovered sharply following the news of a likely US debt deal. While EURJPY rebounded up to 112.25from 110.08, the cross is back challenging 111.50 support given independent EUR weakness.

EUR Bloc

EURGBP

We have UK July PMI today which we expect to slow to 50 vs. consensus of 51.0. The number will be a crucialindicator of the performance of the start of Q3. A weak number may undermine the surprisingly strong Q2 GDPreport and bring the BoE to discuss more QE at the upcoming (Thursday) meeting. As such, a weaker number willpose a fresh risk for GBP, and GBPAUD could retest 1.4750/80 support following the slightly better than expectedChina PMI released earlier today.

EURCHFThe CHF should retrace lower following the likely US debt deal, having been the biggest beneficiary of marketscontinuing to price in a sovereign default risk. USDCHF now eyes 0.8000. Chart wise, down channel support kicks inaround 0.7820.

EURNOK

EURNOK has been trading within a range of 7.72 and 7.79 over the last week. Pressure on NOK is due to relativelyless-liquid nature and the markets now beginning to price the risk of a potential US default with the continued debtimpasse in the US. With a default now likely averted, we still like the NOK longer term on its good fiscal/ currentaccount characteristics. Moreover, crude oil has been holding up rather well, in part explaining the stickiness inUSDNOK of late.

EURSEKWith gridlock over the US debt ceiling, the concern was that tighter USD liquidity to which SEK is particularlyvulnerable given the Swedish banking sector is heavily reliant on short term USD funding. However, with a default isaverted, we think SEK will strengthen on positive fundamentals.

USD Bloc

USDCADUSDCAD pushed higher as Canadian GDP for May (coming in at -0.3%) and US GDP for Q2 (+1.3%) disappointed.A weaker US economy will drag on the CAD, and so local data this week will be crucial. USDCAD is vulnerable to abroader risk-off (hence USD positive) move. The 0.9525/35 highs from last week are important short term resistance.

AUDUSD

AUDUSD managed to bounce back to 1.100 on Friday despite the weaker US GDP numbers and the US debtimpasse. We maintain our medium term bullish view. Last weeks stronger CPI could lead to a more hawkish RBAthis week. Beyond 1.1000, the next major medium term resistance is not until the 1.1500 level, but we have the1.1300/1.1320 region (23.6% fibo-projection from March-May) to contend with first.

NZDUSDDespite the global uncertainty, NZDUSD continues to rally hard. The NZD may be viewed as a safe haven in thisenvironment. With a potentially hawkish RBA this week, we could see AUDNZD push higher. However, a broaderrisk off move will likely weigh on AUD more than NZD..




8/9

FX Forecasts*USD Bloc Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

EUR/USD 1.50 1.55 1.45 1.40 1.35 1.35 1.30 1.30 1.30 1.30 1.34

USD/JPY 78 83 85 90 95 95 95 95 95 95 92

USD/CHF 0.83 0.83 0.90 0.93 1.00 1.00 1.04 1.04 1.04 1.04 0.97

GBP/USD 1.65 1.68 1.59 1.56 1.53 1.53 1.53 1.53 1.53 1.53 1.70

USD/CAD 0.98 0.93 0.95 0.97 1.01 1.01 1.04 1.04 1.04 1.04 1.00

AUD/USD 1.09 1.13 1.07 1.04 0.99 0.99 0.96 0.96 0.96 0.96 0.95

NZD/USD 0.82 0.84 0.81 0.80 0.76 0.76 0.74 0.74 0.74 0.74 0.76

USD/SEK 5.93 5.48 5.93 6.21 6.67 6.67 6.92 6.92 6.92 6.92 6.94

USD/NOK 4.98 4.77 5.07 5.26 5.56 5.56 5.77 5.77 5.77 5.77 5.07

EUR Bloc Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

EUR/JPY 117 129 123 126 128 128 124 124 124 124 123

EUR/GBP 0.91 0.92 0.91 0.90 0.88 0.88 0.85 0.85 0.85 0.85 0.79

EUR/CHF 1.25 1.28 1.30 1.30 1.35 1.35 1.35 1.35 1.35 1.35 1.30

EUR/SEK 8.90 8.50 8.60 8.70 9.00 9.00 9.00 9.00 9.00 9.00 9.30EUR/NOK 7.47 7.40 7.35 7.37 7.50 7.50 7.50 7.50 7.50 7.50 6.80

EUR/DKK 7.46 7.46 7.46 7.46 7.46 7.46 7.46 7.46 7.46 7.46 7.46

Central Europe Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

USD/PLN 2.60 2.48 2.69 2.75 2.81 2.78 2.85 2.77 2.85 2.85 2.65

EUR/CZK 24.3 24.5 24.1 23.9 23.8 23.5 23.7 24.0 23.5 23.3 23.1

EUR/HUF 275 275 269 265 265 260 260 255 260 260 250

USD/ZAR 6.80 6.60 6.55 6.60 6.50 6.50 7.20 7.10 7.00 6.90 6.69

USD/TRY 1.52 1.50 1.56 1.59 1.63 1.65 1.65 1.67 1.69 1.69 1.54

EUR/RON 4.20 4.15 4.20 4.25 4.15 4.10 4.20 4.20 4.10 3.95 3.90

USD/RUB 27.51 27.25 27.86 27.97 28.08 27.65 28.19 27.75 29.07 27.75 27.75

EUR/PLN 3.90 3.85 3.90 3.85 3.80 3.75 3.70 3.60 3.70 3.70 3.55

USD/UAH 7.8 7.8 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.3 7.4

EUR/RSD 100 100 98 97 96 95 93 92 91 90 85

Asia Bloc Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

USD/SGD 1.20 1.19 1.18 1.17 1.16 1.15 1.14 1.13 1.13 1.13 -----

USD/MYR 2.95 2.90 2.87 2.85 2.83 2.80 2.77 2.75 2.73 2.70 -----

USD/IDR 8400 8300 8200 8100 8000 7900 7800 7700 7600 7500 -----

USD/THB 29.50 29.30 29.00 28.70 28.50 28.30 28.00 27.70 27.50 27.50 -----

USD/PHP 42.00 41.50 41.00 40.50 40.00 39.50 39.00 38.50 38.00 38.00 -----

USD/HKD 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 7.80 -----

USD/RMB 6.40 6.31 6.25 6.21 6.17 6.13 6.23 6.20 6.17 6.15 -----

USD/TWD 28.00 27.50 27.00 26.70 26.50 26.00 26.00 26.00 26.00 26.00 -----

USD/KRW 1040 1030 1020 1010 1000 990 980 970 960 950 -----

USD/INR 44.00 43.50 43.00 42.50 42.00 41.50 41.00 41.00 41.00 41.00 -----

USD/VND 20500 20000 20000 20000 20000 20000 20000 20000 20000 20000 -----

LATAM Bloc Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

USD/ARS 4.18 4.25 4.34 4.43 4.51 4.60 4.69 4.78 4.86 4.95 -----

USD/BRL 1.58 1.55 1.53 1.55 1.56 1.58 1.59 1.60 1.61 1.62 -----

USD/CLP 450 435 425 430 435 440 442 445 447 450 -----

USD/MXN 11.40 11.10 11.00 10.90 11.00 11.10 11.10 11.17 11.25 11.30 -----

USD/COP 1730 1690 1690 1700 1710 1720 1725 1730 1740 1750 -----

USD/VEF 4.29 4.29 4.29 4.29 4.29 4.29 8.80 8.80 8.80 8.80 -----

USD/PEN 2.70 2.65 2.63 2.63 2.64 2.66 2.67 2.68 2.69 2.70 -----

Others Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14

USD Index 72.30 70.76 74.87 77.62 80.72 80.72 82.99 82.99 82.99 82.99 79.73

*End Quarter




9/9

FX - Global Strategy Contacts

Foreign Exchange

Ray Attrill Head of FX Strategy America New York 1 212 841 2492 [email protected] Saywell Head of FX Strategy Europe London 44 20 7595 8487 [email protected] Hellawell Quantitative Strategist London 44 20 7595 8485 [email protected] Kowshik Currency Strategist London 44 20 7595 1495 [email protected] Nicola Currency Strategist New York 1 212 841 2492 [email protected]

Emerging Markets FX & IR StrategyDrew Brick Head of FX & IR Strategy Asia Singapore 65 6210 3262 [email protected] Loo Thio FX & IR Asia Strategist Singapore 65 6210 3263 [email protected] Ryan FX & IR Asia Strategist Singapore 65 6210 3314 [email protected] Poh FX & IR Asia Strategist Singapore 65 6210 3418 [email protected] Qi FX & IR Asia Strategist Shanghai 86 21 2896 2876 [email protected] Pawlowski Head of FX & IR Strategy CEEMEA London 44 20 7595 8195 [email protected] Ahmad FX & IR Asia Strategist London 44 20 7595 8620 [email protected] Isik FX & IR Asia Strategist Istanbul 90 216 635 29 87 [email protected] Diego Donadio FX & IR Latin America Strategist So Paulo 55 11 3841 3421 diego.donadio@@br.bnpparibas.com

Production and Distribution, please contact :

Roshan Kholil, Foreign Exchange, London. Tel: 44 20 7595 8486, Email: [email protected]

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Daily FX Str Europe August 2011